Yelp Faces Extortion Claim, Class Action Suit

Feb. 26, 2010

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As consumers continue to search the Internet for businesses, he said, the power of online reviews will continue to grow. "I don't want to be another business that gets hurt by unethical practices," he said.

29 Million People Used Yelp in January

Vince Sollitto, vice president of corporate communications for Yelp, said the allegations "are demonstrably false.

"Yelp treats review content equally for advertisers and nonadvertisers alike. And advertisers pay for advertising, not control over reviews on their page," he said. "This credibility of review content is critical to Yelp's value and is precisely why 29 million people used the site last month to find a great local business."

Though he said that the recency of a review, the credibility of a reviewer and the Yelp community's response to a review can affect its ranking on a business's page, he said he couldn't elaborate on the algorithm the company uses to rank reviews.

"We see daily attempts to write fake reviews promoting one business or negative reviews attacking a competitor," he said. "In order to protect consumers and businesses alike from being victimized by fake or malicious reviews, we employ an automated algorithm that we can't disclose entirely or else people will game the system."

Though some businesses may wonder why reviews disappear or move around a page, he said the algorithm that drives the rankings is set up to be dynamic and devoid of human bias.

Yelp: Content on Site Fluctuates Daily

"Content can fluctuate daily," he said. "While that may confuse some business owners, I think most recognize that the value of good review content is tremendous."

According to Yelp's Web site, reviews may vanish if the writer chooses to remove it, if the "automated Review Filter" suppresses it, or if another user flags it, believing it violates the site's review guidelines. In that case, the customer service team would review it and then could manually delete it.

The site also says that reviews can disappear and reappear over time, as the people who write the reviews become more or less established on the site.

Yelp acknowledges that the process can be "frustrating for some," but even before Perrault's lawsuit, some local businesses claimed that it wasn't just frustrating, it was unfair.

A story published last year by the East Bay Express featured a number of Bay Area business owners who said Yelp had offered to bury negative reviews if they signed up for a monthly ad subscription.

At the time, the company's COO Geoff Donaker said it wasn't within advertisers' and sales representatives' ability to manipulate rankings. But in an interview with the local paper, he said Yelp could better train the sales team to be "crystal clear about what you get and don't get."

Plaintiff's Attorney: 'Dozens' of People Describe Similar Situations

Since news of the class action suit has spread, Jared Beck, one of Perrault's attorneys, said several business owners have contacted his firm with complaints similar to those outlined in the lawsuit.

"We've been directly contacted by dozens of people. And in every location you can think of. Literally across the country," said Beck, an attorney with Beck & Lee Business Trial Lawyers in Miami. "What we learned is that this isn't an isolated practice or a single event or a single sales representative run amok. This seems to be a regular business practice."